IMG Academy, the elite sports boarding school in Bradenton, Florida, agreed in February 2026 to pay $1.72 million to the U.S. Department of the Treasury to settle allegations that it accepted tuition payments tied to a Mexican drug trafficking organization. The settlement with Treasury’s Office of Foreign Assets Control resolved 89 apparent violations of the Foreign Narcotics Kingpin Sanctions Regulations and stands as one of the first major OFAC enforcement actions against a school.1U.S. Department of the Treasury. OFAC Recent Actions
What OFAC Found
OFAC announced the $1,720,000 settlement on February 12, 2026.1U.S. Department of the Treasury. OFAC Recent Actions The agency said IMG had enrolled the children of two individuals on the Specially Designated Nationals and Blocked Persons List, a federal registry of people U.S. persons are barred from doing business with. The two parents had been designated for providing financial support to a Mexican drug trafficking organization.2MySunCoast. IMG Academy Fined for Accepting Tuition Funds From Parents Linked to Drug Cartels
Between 2018 and 2022, the school signed and renewed tuition agreements for the two students and processed payments for tuition, lodging, and related fees.3Bradenton Herald. IMG Academy Settlement With OFAC The 89 apparent violations broke down into six enrollment agreements and 83 separate payment transactions.4Sports Illustrated. Florida’s IMG Academy Fined $1.7M for Accepting Fees Linked to Mexican Drug Cartel Individual tuition obligations ran from about $47,000 for a half-semester to more than $102,000 for a full year.5The Athletic. IMG Academy Settlement Over Mexican Drug Cartel Ties
Treasury did not publicly name the parents, the students, or the specific cartel.2MySunCoast. IMG Academy Fined for Accepting Tuition Funds From Parents Linked to Drug Cartels The agency classified the conduct as “non-egregious” and said the violations were “not voluntarily disclosed,” meaning OFAC discovered them through its own investigation rather than a self-report.1U.S. Department of the Treasury. OFAC Recent Actions
How the Tuition Payments Reached the School
The money did not arrive directly from the sanctioned parents. Payments were routed through non-designated third parties in Mexico or made by credit card, arriving at IMG’s U.S. bank account as wire transfers from third-party individuals and entities located primarily in Mexico.2MySunCoast. IMG Academy Fined for Accepting Tuition Funds From Parents Linked to Drug Cartels
OFAC used the case to underline that this kind of routing does not insulate an institution. IMG had invoiced and communicated directly with the sanctioned parents, whose names matched entries on the SDN list at the time of the transactions. The agency’s position is that schools must screen every party with control over a financial obligation, not only the named customer on the enrollment paperwork.
Where Compliance Broke Down
OFAC found that IMG had no sanctions screening program and no adequate third-party payment controls during the years covered by the violations. The agency called the absence of a denied-party screening program “reckless,” a finding that likely shaped the penalty even though the overall conduct was rated non-egregious.
The Foreign Narcotics Kingpin Designation Act, which underlies the case, authorizes OFAC to designate foreign nationals connected to drug trafficking as SDNs and bars all U.S. persons, including schools, from dealing with them directly or indirectly. OFAC enforces those prohibitions on a strict liability basis. A school can be penalized whether or not it knew it was transacting with a sanctioned person.
IMG reportedly took remedial steps and adopted a new compliance program after the violations came to light, but the financial penalty remained.6Mintz. Independent Schools and OFAC Enforcement: How to Protect Your Institution
What the Settlement Signals to Other Schools
Before this action, OFAC enforcement had been concentrated almost entirely in the financial sector. A $1.72 million penalty against a prep school was something new. OFAC explicitly noted that academic institutions with international students, foreign payment sources, or international partnerships face real sanctions risk and need to build compliance measures.7NBOA. OFAC Sanctions Compliance and Independent Schools: New Guidance
Legal analysts writing after the announcement said sanctions compliance “is no longer optional” for any school managing international students or cross-border payments.8Mintz. What OFAC’s Enforcement Action Against IMG Academy Means for Private Schools The practical takeaways from the case: the student does not have to be sanctioned for a violation to occur if the parent or payor is; third-party payment structures do not shield the school; and screening families against the SDN list is a minimum defensive step. Commentators recommended that schools screen students, parents, guardians, tuition counterparties, donors, vendors, and payors, with extra attention to international families and unusual payment routes.
A Note on Timing and Ownership
The conduct at issue ran from 2018 through 2022, while IMG Academy was owned by Endeavor Group Holdings. In June 2023, Endeavor sold the school in an all-cash deal valued at $1.25 billion to BPEA EQT, in partnership with Nord Anglia Education.9Endeavor. Endeavor Completes Sale of IMG Academy to BPEA EQT in Partnership With Nord Anglia Education The settlement and its cost landed on the institution under its current owners.